How can you contest a default on your credit file?

If you’ve had a default placed on your credit file it can affect your financial situation in a number of ways. The drop in credit rating makes it more difficult to obtain borrowing, and in some cases, it can even affect your employment.

Defaults remain on a credit file for six years so this is a long-term impact rather than a temporary inconvenience, but if you believe the default is incorrect it’s important to contest it so your credit record reflects the true situation.

But how can you contest a default on your credit file, and what is the first step to take?

Order a credit report from the main credit reference agencies (CRAs)

Three main credit reference agencies exist in the UK – Experian, Equifax, and TransUnion. The information held with each one can differ, however, so it’s important to order a copy from each agency.

If a default appears on one report, it could also be present on another, in which case you may need to contest an entry two or more times.

What does a default means to lenders?

When a default is on your credit file, lenders believe there’s a likelihood you won’t pay your debts on time and may even stop repayments altogether - this illustrates just how damaging a default can be and why you need to contest it if it’s incorrect.

So why might a default marker have been incorrectly placed? Lenders and other creditors do make mistakes when reporting information to credit reference agencies, with errors potentially including:

• Reporting the same missed payment twice
• Flagging up your credit account in error
• Using a default maker incorrectly

How to contest a default marker

• Contact the creditor who has registered the default - you’ll need to present documentary evidence to support your case, such as credit card statements, bank statements, or receipts. If the creditor argues the default marker is correct, get in touch with the credit reference agencies.
• Once you’ve identified which credit reference agencies show an incorrect default marker you can file a dispute with the agency or agencies concerned. Each will have their own method for doing so, but it typically involves downloading and completing a form from their website.
• The credit reference agency will investigate the default, but if they aren’t able to change your credit file you’re entitled to state on your credit report that you believe the default to be incorrect. This is done via a statement (of up to 200 words) that appears next to the disputed item, so anyone reading your credit file will see you don’t agree with the default and will hopefully bear that in mind when making their decision.

If you would like more information on contesting a default marker, or any other aspect of your credit rating, please call Scotland Debt Solutions. We specialise in helping Scottish residents to escape debt, and can arrange a same-day meeting free-of-charge at one of our offices around Scotland.